Thursday, September 1, 2011

Libya can resume crude oil production

Libya can resume crude oil production within a matter of weeks and can return to prewar output within 15 months, according to the newly appointed chairman of state-owned National Oil Corp.

NOC Chairman Nouri Berouin said Libya was producing 1.6 million b/d before the outbreak of civil war in February. Berouin also said most of the country’s oil fields suffered no major damage and are in good condition but that minefields around the Brega export terminal could slow the resumption of normal operations.

Berouin said it is necessary to secure the fields and then to begin clearing the minefields. Increased output would require logistical support as well, most likely from the country’s foreign partners.They need the money. France, the UK and other foreign allies of the National Transitional Council (NTC) are slowly unfreezing some of the Qadhafi-era billions that the Western countries long promised to the rebels. Qatar remains a generous backer. But the flow of funds is still barely a trickle and the fledgling government is struggling to keep its economy afloat.

That view was largely supported by Ali Tarhouni, who holds the oil brief for the rebel National Transitional Council, now widely recognized internationally as Libya’s new government.

Tarhouni said NTC expects to rehabilitate a number of wells in the coming few days and that oil and gas exports would rise gradually, pending a full report from NOC concerning the state of the industry.

Tarhouni acknowledged that forces loyal to Libya’s deposed leader Moammar Gadhafi remain in the country, but he dismissed them as a spent force and said they do not represent a significant threat to industry.

NTC is fully up to the task of protecting Libya’s oil and gas fields, Tarhouni said, adding that the group has no interest, plans, or policy to invite any international forces to enhance security or protect the fields.

The countries meeting in Paris in support of Libya's rebel interim government agreed to unblock $15bn in frozen Libyan funds immediately, the French president said.

"We are committed to returning to the Libyans the monies of yesterday for the building of tomorrow."

The leaders insisted on the need for Libyans themselves to lead the way forward and to avoid the lessons learned in Iraq, where the fall of Saddam Hussein was followed by years of sectarian violence.

Both spoke after leaders and envoys from 60 nations and world bodies such as the UN and NATO met in Paris for talks with NTC to map out Libya's rebuilding.

Mustafa Abdel Jalil, the chairman of NTC, has said Libya's own people must now seek reconciliation among themselves after a summit in Paris with world leaders.

The remarks of Tarhouni and Berouin coincided with an announcement by the head of the Franco-Libyan chamber of commerce that representatives of Total SA will form part of a mission of French firms travelling to Libya to assess the situation next month.

Michek Casals, chamber president, said the group wants to understand how NTC is managing the crisis in Libya and what urgent measures it needs to restart the country’s oil industry.

In addition to Total, the mission is to include experts from engineering firm Alstom, defense group Eads, state defense and electronics group Thales, and telecom equipment-maker Alcatel Lucent, in addition to representatives of smaller companies working with hospitals and oil.

Meanwhile, European Union diplomats said sanctions imposed against several Libyan ports, oil companies, and more than a dozen other entities could be lifted as soon as Sept. 2.

The EU reached an agreement in principle on Aug. 31 to remove the six port authorities from its sanctions list as well as 22 other entities, including 3-4 oil companies, diplomats said.

EU governments will formally approve the decision on Sept. 1 and the move will come into force when it is published in the 27-nation bloc's Official Journal on Sept. 2.